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“…Pleeeaase release me, let me goooo…”

April 3, 2007 — Will O'Connor

What a fortuitous piece of luck! No sooner do we launch the DERT blog than a story crops up that encompasses all aspects of our DERTy world. The Apple and EMI deal has the lot – digital entertainment, music, distribution, rights, applicable technologies and video, all synonymous with our DERTy activities

We operate in the space where these areas meet – the muddled and incestuous arena where everyone wants to protect what they’ve got, forge new and strategic alliances, exploit the market it to the fullest extent and claim outright ownership.

Our job is to make sense of it all, understand how it fits together and make sure that the people who come to us are equipped with everything they need to succeed. No small task.

The Apple and EMI ‘partenrship’ is one such new and strategic alliance. EMI has released it’s entire artist catalogue to the Apple iTunes site, free from the restraints of DRM protection. The specifics from Eric Nicoli (EMI CEO) and Steve Jobs (Apple Uber-Lord) are as follows:

AAC format tracks will be available from EMI artists at twice the sound quality of existing downloads with their DRM removed, at a price of $1.29/€1.29/£0.99 (20p more than DRM’d tracks)

iTunes will continue to offer consumers the ability to pay $0.99/€0.99/£0.79 for standard sound quality tracks with DRM still applied

Complete albums from EMI Music artists purchased on the iTunes Store will automatically be sold at the higher sound quality and DRM-free, with no change in the price

Consumers who have already purchased standard tracks or albums with DRM will be able to upgrade their digital music for $0.30/€0.30/£0.20 per track

All EMI music videos will also be available on the iTunes Store DRM-free with no change in price.

The full statement from EMI can be seen here, but what does it mean for the industry and, importantly, consumers?

Well, it’s a HUGE step for the digital music business. DRM has been condemned from the outset, drawing vehement criticism for controlling consumers and dictating how and where users listen to their music. Removing these barriers is a significant step, essentially throwing the market wide open and giving consumers choice and control. Where previously, purchased tracks could only be played on certain players or burned to CD a certain number of times, customers are now free to do whatever they wish with the tracks they purchase.

Apple invariably leads the way here and where iTunes moves, others follow. EMI has stated its DRM-free content will be available to its retail customers so expect to see download sites everywhere battering down EMI’s doors to get the DRM-free tracks. Then watch as record labels everywhere grudgingly follow to stop themselves losing out on the big-bucks.

While it’s a positive step for the market (where the benevolentApple and EMI stride in, like conquering heroes, to free music from a life of DRM-slavery!) it’s still rooted in Apple’s commercial aim to remain the dominant force in digital music provision (and EMI’s aim to remain solvent). In his open letter in February (when the deal with EMI was almost certainly at its closing stages) Jobs claimed that “cconvincing them[record labels] to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly.” This is the same Jobs who’s iPod/iTunes vertical represented the most vigorously protected (albeit the most successful) ‘walled-garden’ in the industry. It’s been noted by some bloggers that while most labels dictated the use of DRM to prevent piracy, a number of tracks on iTunes, available DRM-free from the artist/label, were only available from iTunes strapped in Apple’s protected ‘Fairplay’ AAC format. A swift turn of faith? Almost certainly, but one which will certainly reinvigorate the digital download market and ensure Apple’s position at the helm.

The iPod now maintains an 80 per cent (approx) market share globally – the step to provide rights-free tracks will do little to dent that; in fact, without the complexities of DRM clouding the end-user’s understanding of digital music, I’d expect an increase in consumer confidence to push sales. And EMI? For the struggling label that’s lost out a couple times with mergers and sales falling through, this is a step that will ensure their artists’ albums are some of the most prominently available on the worlds most successful download site – no small fact when you need every sale you can get.

But while both EMI and Apple claim that the tracks are available rights-free, for everyone to purchase (at ‘slightly’ increased cost) and for everyone to transfer to any player they wish, things are not as clear as they may first appear. Tracks downloaded form iTunes are only availble in Apple’s AAC format rather than the more universally compatible MP3 format;

this means that owners of a variety of digital music players will find they need to convert the format types to make them work – not the simplest of process for your average consumer and one that results in a loss of quality, eating away at the much-lauded ‘higher sound qulaity’ tracks.

So while Apple is removing the traditional DRM, it’s still ensuring that the iPod/iTunes vertical retains its integrity. Owners or non-Apple players will have to wait until other services offer tracks in MP3 or WMA formats. Shrewd!

***UPDATE: Just been for lunch with the guys at 7Digital. the EMI deal isn’t an exclusive – it’s just another shrewd piece of lime-light robbing from Apple. The Good, the Bad & the Queen, EMI’s flagship non-DRM launch album was available on 7Dig (and others) from the moment it was announced. It’s just that flailing EMI wanted to shout about it with the biggest name in digital music. Understandable really…****

Are we about to usher in a time when you can download what you want, from where you want, without the fear of copyright-bailiffs kicking our door in and carrying off your furniture as payment? Maybe. It’s certainly the biggest step since DRM was introduced and we’ll have to wait and see if the other big labels jump on the band wagon – it’s not certain as they all love to keep a tight rein on their profits.

And as for video? When asked about it at the press conference, Jobs’ only response was, “Video content has developed pretty differently from music … I wouldn’t hold the two in parallel right now”. Wait and see chaps.